second half kickoff, july begins on an up note. will the markets momentum continue once those profit reports start rolling in? >> record setting heat. how the people and businesses of the southwest are handling those scorching temperatures. >> and the prices of popcorn, the question on everyone's mind.

why does the crunchy stuff cost so much? all that on nightly business report for monday, july 1st. >> the new quarter and the second half off to a good start with investors in the buying mood. the major stock averages rallied today, thanks to some encouraging reports on the economy. construction spending in may hit a four and a half year high, helped by all that home building. and manufacturing rose a bit higher than expected for the month of june. the blue chip dow was up most of the day. and trading above the critical 15,000 level, but gave up a lot of momentum near the close. some strategists blamed it on jitters over anti-government protests in egypt. the dow was up 173 points at the session high, but finally closes up 65 points. the s&p 500 rose 8 points. the start of a new quarter means it's soon to be earnings time, beginning next week we will learn how companies did over the past three months and

what their chiefs say about business for the rest of the year. joining us now to discuss is paul schatz, he's president of heritage capital. good to have you with us. >> thanks for having me. >> a lot of the investment folks we've been talking to say now that the fed has signalled it may dial back on stimulus, the focus is going to shift more and more to business fundamentals. what companies are able to grow profits and revenues and which are not. do you agree with that? >> the answer is yes, i think it's a short term focus, tyler. first of all, there's really a vacuum of news right now, earnings are going to start next week. we're going to be focused on them until we're not. that's probably only a couple weeks at best. >> what can we expect out of this earnings season. what will ceo's be telling us about their earnings and revenues? >> i think it's really more of the same. people are craving for top line growth. they're not getting it, they're making the numbers on the bottom

line, the top line growth is not there. i think that has somewhat of a longer drag on the market. i think it remains a long term drag. equities are really stretched. you really need earnings to get any kind of catalyst here to get us past 16,000 on the dow. >> and you don't see that blow joup of earnings coming? >> the s&p 500 is at about 1600 and change or thereabouts it was a heck of a good first half. where do you think this barometer is going to end the year. are the best days behind? >> january our forecast was that this year was going to be tremendously front loaded. much like 1987 was, and i still feel the same way, i think all the easy gains are made. i think it's at least 50/50, the highs for the year. i can see a poke above not making a nominal new high. i wouldn't put all my eggs in the equity basket right now. wur going to have an opportunity

to buy equity, 10 to 20% lower over the next three to six months. >> where would you put your eggs right now? what basket do you see opportunities for investors? >> i think you have to play it close to the vest. just because market's going to gone on sale. and i've heard other folks talk to, we're back to single stock risk and a rising tide, not lifting all shifts. i agree with that. i think whatever rallies come from here are going to be very narrow, and i don't think you're going to throw a dart at an index, and the index is going to lead the way. if you're selective, i'm bullish on financials and biotech. i think even health care could get a little big here. the key is, when the market corrects, which i think it will over the next couple months, they're all going to get hit. it depends upon, to what degree. on the flip side, bonds have been hit pretty hard. and i think there is some --

ths some relative value in the bond market. certainly, investments, the higher quality bonds i'm looking at right now, as well as floating rates. >> another way to put, you're going to have an opportunity to buy stocks at 10 to 20% lower prices. you're going to lose 10 to 20% of your money if you're in stocks over the next four months. >> let's talk about bonds. you think they're bottoming or what? >> i think it depends on what time frame you look at. bonds had a tough second quarter. they had a tough june. and let's say the 30 plus year bull market ended this year. it's not going to be a straight line move from 2% in the ten-year, 8% in the ten year. we were stretched already, the bond market got hit pretty hard. i think the next decent move in bonds, the bond market probably rallies, which means rates come down a little bit. that's where you probably have the third quarter. bonds should be okay this quarter, for the more

aggressive, could you tiptoe into gold and the metals. >> thank you very much for your look ahead, paul schatz, president of heritage capital. one attempted merger on this monday, onyx pharmaceutical has rejected an unsolicited takeover offer from amgen, saying the offer significantly undervalued the company. shares of onyx surged today, closing up a staggering 51%, the company says it's now exploring other potential suitors. another buyout makes a legendary newspaper company. the biggest tv station owner in the nation. the tribune company, best known as the publisher of the chicago trib is paying 2.73 billion in cash to buy 19 television stations from a company called local tv holdings. creative name there. the move gives tribune ownership

of 42 tv stations now. and a significant revenue stream as it looks to sell its newspaper operations. kohlberg and company is taking a 160-year-old piano maker steinway piano instruments private. it's ticker symbol will be dropped from the big board lvb. with raises hard to come by for the average worker, top company executives are singing a different tune. seeing their pay continue to climb, thanks to a healthy stock market. a new study just out shows that on average, ceos of big companies earn 20,000 more in 2012 than they did the year before. which ones earn the most and how much money are we talking about? mary thompson has the details? >> pay for the average work may

be stagnant. but the highest levels of corporate america continues to rise. >> once you have these high numbers, everybody wants them. >> in 2012, the average pay for the top 200 ceos with firms over $1 billion in revenue, $17.8 million. median pay rising 16%. according to a study by the compensation researcher equilar. total shareholder return was in the double-digits. returns downplayed by rosa beth kantor, who says many times the markets gains mask a ceo's true performance. >> we often credit ceo's as though they were geniuses, even though they may not have had that much to do with it, and they may be bankrupting the long term in order to get those short term rises. >> rising to the top spot for pay, holding on to the rank in

april. pulling down $96.2 million. 24% more than in 2011, even as total shareholder return fell 22%. a disconnect criticized by yale's jeff sonnenfeld. >> we're going to wonder what the boards have been doing. >> examples like activism's robert kotech, 64.9 million is an increase from 2011. even as shareholder returns fell 12%. behind him, two men with pay cuts, even as returns for their shareholders jumped respectively. less munvez was less than 2011 pay. level three communications ceo james crow the 40.7 million. median tech companies dominating the upper end of the 2012 list

of top paid ceo's, while outside stock and option grants continue to widen the pay gap between the top and bottom of the american workforce. for nightly business report, i'm mary thompson. >> some of those silicon valley ceo's have a chaotic commute this morning. a strike shut down san francisco's commuter trains. hundreds of thousands of daily riders scrambled on to backup buses or took to their cars after the first labor shutdown of the bay area rapid transit system in nearly 0 years, worker contracts expired overnight after three months of failed negotiations. the sticking point wages and medical and pension benefits. so far, no talks are scheduled right now. from the rails to the roads and tough new federal rules for truck drivers. it took effect today. drivers can't drive more than eight consecutive hours now without taking a 30 minute break. they can still drive a maximum of 11 hours a day.

they can't work more than 70 hours in a seven-day period without a restart period of a consecutive 34 hours off. what happens when congress can't agree on something. starting today, new federally subsidized stafford loans doubled. the rate for existing loans stay the same. as for congress, they come back to work next week. lawmakers in egypt also having a difficult time. hundreds of thousands of mostly peaceful protesters remain in cairo's main city square for a second day. demanding the ouster of mohammed morsi after one year in office. egypt's top general gave those political leaders a 48-hour ultimate um to settle their differences and address the demands of the protesters or the country's military will impose its own road map for the nation.

the heat is on here as well. century old temperatures are broken in the nation's southwest. the triple digit heat looks to be around for a few more days. ♪ viva viva las vegas >> what happens in vegas melts in vegas. >> it's smokin' out here. >> i've never been in 117 degree heat. >> it's hard to have a lot of fun when it's 117 degrees sunday. tieing a sin city record, it's harder to work. >> the entire west has been cooking and the oven won't shut off for several more days. in death valley, temperatures reached 129 degrees a record for june. in palm springs it was hotter inside grant williams car, where he photographed cooking a prime rib on the dash. in phoenix, some usairways commuters planes were grounded for fear the hot air wasn't dense enough to create lift.

>> 19 firefighters were killed. and probably the worst disaster that's taken place in history in the state of arizona. >> in las vegas an elderly man without air conditioning died. the heat strained power grids, 1300 customers reportedly lost power. >> it could have been worse. nv energy, which is being acquired by warren buffett's berkshire hathaway, they can surge the grid with electricity in only ten minutes when needed. the grid operators were warning residents in the northern part of the state, they must reduce power usage over the next few days. as demand for electricity returns to prerecession levels. >> vegas casinos are hoping it keeps tourists inside at the gaming tables. after a strong start to 2013, early numbers for the second quarter show a drop from a year ago. this weekend, wynn resorts says was nearly sold out.

mgm said the change it saw was fewer people from the pool. as long as someone from out of town was braving the heat, somebody hoping to make a buck wouldn't be far away. for nightly business report, jane wells, las vegas. still ahead, would you buy an expensive piece of art online. amazon is making a bet you will. first, a look at some stocks that hit all time highs. the dual over dell has entered a new chapter. dell's board says its special

committee has reviewed carl icon's latest proposal. ikon has secured financing in hopes of trumping michael dell's planned buyout of the pc maker. tonight's focus begins with a pair of upgrades. best buy left for dead not so long ago. credit suisse resumed coverage with an outperform rating. best buy has more than doubled since november, and closed up more than 8.5% on double the normal volume. morgan stanley upgraded pandora to overweight. pandora is one of the top internet properties and investors seem to agree. shares trading at three times normal volume today. pandora hit an all time high before closing at 18.95, up almost 3%, another stock that has doubled year to date. disney gained today as well.

on the strength of monsters university. it was the box office winner for a second week in a row. after the bell, disney's board extended bob igris' tenure through june 2016. disney shares rose more than 1% to 63.93. cablevision led the s&p 500500 winners. it completed the sale of cable systems in four western states to charter communications. they also figure in the industry buzz about possible moves to consolidate table companies. cablevision gaining more than 9.5% on double volume, closing at 18.44. apple has a lot of tech watchers very excited. even to find out more about the company's next big gadget. apple has applied to trademark an i watch in that country, raising hopes that a long rumored smart watch, a wearable computing device may soon be on

store shelves. no comment from apple, and no timetable or frame on whether that patent application might be approved. groupon is also trying something new. targeting upscale diners. the online coupon site launched a new service today called groupon reserve. it lets diners book some of the better tables in restaurants in their cities at up to 40%. they hope to eventually expand into high end hotels and spas. groupon isn't the only company aiming for a well healed customer, amazon.com now looking to open a new section offering one of a kind painting in prints and other fine art. robert frank has more. >> the idea of buying a multimillion dollar picasso online once seemed surreal. now it's becoming a reality. media reports say that amazon,

the online retail giant is looking to start selling fine art online. it would team up with galleries around the country and sell works for a small commission. amazon denies comment. currently what is sold on amazon are posters, prints and watercolors. most priced under $400. amazon's move into the high end art world could see a shift to the wide open digital screen. already the auction houses are doing a big business selling fine art and collectibles online. more than $1.5 billion of christie's sales last year went to online bidders at its regular auctions. this painting called october on the cape was sold to an online bidder for $9.6 million. the company also sold a shang dynasty bronze wine vessel for

$3.3 million to an online buyer. sothebys and christies have developed online bidding platforms. when christies auctioned off the collection for $183 million. it included an online only sale. those 1,000 pieces auctioned off, totalled $9.5 million. about 9 times the presale estimates. the big question is how the major art galleries will react to another retail competitor. none would comment on the air, but one gallery owner telling me today, we don't sell fine art online and we probably never will. time will tell whether that remains a good strategy. for nightly business report. i'm robert frank. >> if you want to read more about online art auctions, log on to our website. coming up on the program, the answer to that question that baffled even some economists. why is movie theater popcorn so expensive? first, let's take a look at some financial stocks trading at multiyear highs.

a safety recall to tell you about after 100 complaints and five crashes where no one was injured. ford motors is recalling nearly a half million older model sedans. that's on mercury sables and ford taurus's from the years 2000 to 2003. if you live in california, you may not want to drive much at all. california residents pay the highest gas tax in the country. more than 70 cents a gallon after federal and new state taxes are added in. state officials say the increase was necessary to make up for a gas tax or revenue shortfall last year. along with projections for even

lower fuel consumption. what's going on here? californians are driving more fuel efficient cars. >> at the opposite end of fuel efficiency. big recreational vehicles sales are soaring thanks to pent up demand and the desire to camp out in comfort. winnebago's stock is soaring, and it's backlog of orders have tripled in the last few years. phil lebeau has more. >> at the camping world rv lot, business is booming. >> our business has been up month over month. this year we're up approximately 20%. >> walk into the latest rv's and it's almost like walking into your kitchen or living room. large flat screen tv's, stainless steel appliances, and leather chairs.

increasingly, rv buyers want comfort and connectivity. >> it's very much -- a little bit of showmanship when they get to the campground of what their rv can do. >> the buzz on the shop floor at winnebago industries in forest city, iowa. the company's backlog of orders more than doubled earlier this year, and it keeps growing 37. >> it's an entirely different environment than it was during the recession. >> during the recession sales plummeted. >> what's changed? an improving economy is one reason rv sales are up this year. winnebago has found success rolling out models like this, which allow buyers to get in at a lower price point. >> you're seeing a push for the value segment, which are lower price points in the traditionally large and most expensive class a models. winnebago offers the vista at just under $70,000.

>> whether it's a base model or a tricked out motor home for $380,000, the rv is back, and heading to a campground near you. phil lebeau, nightly business report, chicago. many of us may be hitting the road in a new rv, for others it's the height of the summer blockbuster season at the multiplex. if you've been to the movies lately, you know that not only are ticket prices higher, but so is the cost of your popcorn. that popcorn may not really be all that expensive. a lesson in pricing. i'm here in new york city to talk about an issue we've had for decades. how to put americans back to work, why after you pay $11 for a movie, the price of popcorn is so darn expensive. a lot of people say the answer is simple, once you're inside, they own you, they can charge you anything they want for the popcorn. the common mistake, the easy answer may not be the right

answer. theater owners have monopoly pricing power, why wouldn't they use it to charge you for a drink of water or to go to the bathroom. theater owners are engaged in a process called price discrimination. between movie gooers who want to pay more to go to the movies and those who want to pay less. >> to understand why this works, let's rewind and go back to the beginning. let's say the theater decided to charge you $20 to go to the movies, that would turn a lot of people away. by keeping the price low, they get everyone's $11 who wants to see the movie, and create an opportunity to get the other $10 at the concession stand. >> people who go to the movies are the same people who love to eat popcorn at the movies, what's happening is a process called price discovery. the theater goer and moviegoer are in a silent conversation over how much he or she will pay to go to the movies. that's the best way to charge people money. it's hard to imagine, you don't

have to buy popcorn at the movie theater, by charging a lot at the concession stand, the theater owner maximizes profits and the number of people who come to the movies. the popcorn be probably isn't too expensive. if it was you wouldn't buy it, or go to the movies. the popcorn is probably just about right. for nightly business report, steve leachman. the end of an era. if you've ever been to new york city's metropolitan museum of art. it's inscribed with a m, most people wear it on their collar or shoulder strap. you're a proud subscriber of the arts. not any more. they're 3 skrercents a piece, s museum is switching to stickers, they cost about a penny. we want to hear from you. tell us which stocks you'd like our market monitor guests to

discuss this friday. send us an e-mail to nbr.com and tell us also where you're from. that's nightly business report for tonight. thanks for joining us. >> and i'm tyler mathisen, thanks for me as well. have a great evening, everybody, we'll see you back here on tuesday evening.

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